By Harshita Mary Varghese and Marie Mannes
May 7 (Reuters) – Sweden’s Polestar reported a bigger first-quarter loss on Thursday, as pricing pressure and U.S. tariffs offset stronger sales, sending its shares plunging nearly 8%.
Polestar, majority-owned by China’s Geely Holding, has rolled out discounts to attract cautious buyers as U.S. tariffs compress margins and raise manufacturing costs.
Despite a strategy focused on Europe, which accounted for 78% of its sales and led to a 7% increase in sales during the January-March period, its net loss widened to $383 million in the first quarter from $166 million a year ago.
“The world around us continues to throw up challenges. This is reflected in our results for the first quarter,” Polestar CEO Michael Lohscheller said on a call to analysts, providing no financial outlook for the year.
Revenue was broadly flat at $633 million as it sold fewer higher-priced Polestar 3 models and a greater share of Polestar 4 cars, which accounted for 9% and 67%, respectively, in the quarter.
To save on costs, Polestar has opted to roll out refreshed versions of aging models rather than launching all-new ones. It expects deliveries of a new Polestar 4 variant to begin later this year, followed by a refreshed version of the sedan Polestar 2 in 2027. The automaker’s next fully new model comes in the form of the compact Polestar 7 SUV thereafter.
Like many EV startups, Polestar is burning cash to expand its line-up and has in recent months secured loan and equity funding from Geely and banks, while Volvo Cars is converting debt into equity. Polestar also secured approval for a 50 million euro addition to its green trade finance facility.
Its cash position was $676 million at the end of the first quarter, down from $1.16 billion three months earlier.
First-quarter expenses also rose on higher sales commissions, one-off personnel costs and marketing.
The company expects to publish its second-quarter sales on July 9.
(Reporting by Harshita Mary Varghese in Bengaluru and Marie Mannes in Stockholm; Editing by Maju Samuel)
